What if you could mimic the moves of some of the best-informed traders on the planet? That’s the idea behind our new series that’s focused on what we’ll call “smart money” option trades.
In short, we’re using Market Chameleon to scan the options market for unusual activity and identifying some of the most interesting mega trades – relatively large volume options trades we can potentially mimic… but on a smaller scale!
While we can’t be 100% certain whether the trader bought or sold the options, these are our best guesses based on the information we do have and the overall direction of the stock’s chart.
That said, one of the most interesting “smart money” trades we came across during the past day is Match Group Inc. (NASDAQ: MTCH).
Match Group, Inc. provides dating products worldwide. The company’s portfolio of brands includes Tinder, Match, Meetic, OkCupid, Hinge, Pairs, PlentyOfFish, and OurTime, as well as various other brands.
Trader Just Bet $4,192,000 That MTCH Will Have a Significant Downmove in the next 16 Months.
On Tuesday, September 07, 2021, a “smart money” trader seems to have bought 1,600 of the January 20, 2023, $150 put options on MTCH for $26.20 per share. Her outlay was $4,192,000.
MTCH – Options Trades
MTCH will need to decline to $123.80 for the put option trade to break even — around a 22% return from the current price of $159.36. And then for every $1 the stock falls below $123.80, our “smart money” trader will make $160,000! She seems to be anticipating the underlying stock to have a significant downmove in the next 16 months.
On analyzing the chart of MTCH, the stock seems to have broken down from a prevailing uptrend (marked as a blue color line). There is also a resistance area nearby for the stock, with multiple tops being formed (marked as pink color dotted line).
MTCH – Daily Chart
This lends credence to our conclusion that the pro bought these put options, as opposed to selling them.
If you agree and would like to mimic this trade, here’s how:
Buy to open the January 20, 2023, $150 put options on MTCH for $26.20 or better.
As always, depending on your risk appetite, do remember to set a stop-loss for the options trade to avoid significant losses.
Happy Trading!
— Trades of The Day Research Team
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